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Wednesday, June 17, 2015

A five-judge panel from a respected New York appeals court has dealt a blow to Chevron in a dispute between two groups of villagers related to the company's $9.5 billion pollution liability in Ecuador.

In a decision issued this week, the court unanimously ruled that any dispute among Ecuadorian villagers over the distribution of proceeds from the historic judgement should be heard in the same courts that issued it. American law professor Judith Kimerling, who claims to represent a handful of indigenous families out of an estimated 30,000 affected Ecuadorian villagers, had asked the New York trial court to issue an order that her clients were entitled to a proportional share of the proceeds.

Kimerling's theory was sound but her choice of forum was nuts from the get go. Although she purports to be a human rights lawyer, in reality she was doing the bidding of Chevron by attacking Ecuador's courts as incapable of dealing with the dispute. She could not point to a single instance in the history of American jurisprudence where a U.S. court tried to resolve competing claims among foreign citizens over the proceeds of a foreign judgment issued in the courts of their own country.

The latest appellate court decision, issued unanimously, is a direct rebuke to Chevron and raises yet more questions about the wrongheaded approach of U.S. trial judge Lewis A. Kaplan in a similar case brought by the oil giant.

At Chevron's request, Kaplan in 2014 refused to seat a jury and then entered a bizarre and unprecedented order that tries to block the Ecuadorians from collecting the proceeds of their judgment anywhere in the world. Kaplan refused to even review the 105 technical evidentiary reports that demonstrated Chevron had deliberately disposed of its toxic waste in the rainforest, decimating indigenous groups and causing an outbreak of cancer that has cost the lives of numerous local residents.

Dozens of international law scholars filed a "friend of the court" brief blasting Kaplan's decision as a violation of international law. The Kaplan ruling is under appeal before a separate federal panel.

In the meantime, just a few blocks away, five judges from a New York state appeals court used logic and common sense sorely lacking in Kaplan's courtroom. The court agreed with Steven R. Donziger, a New York attorney who has represented the affected communities in Ecuador for two decades. Donziger had argued that any dispute over the judgment obviously should be resolved in the nation that conducted the trial.

According to the state appellate court,

"Ecuador is the forum more convenient to the parties and witnesses in New York; there is no unfairness in requiring plaintiffs to prosecute their claims in Ecuador where they reside; the underlying litigation took place there; the underlying judgment to which plaintiffs claim a proportional share, was issued there; and defendant Amazon Defense Coalition, which was directed to distribute the proceeds of the judgment, is domiciled there."
Donziger, in his own statement, praised the court's logic and implicitly criticized Kaplan:

"The New York state appellate court properly recognized that issues related to an Ecuadorian judgment against Chevron should be resolved by the courts of Ecuador, not by U.S. trial judges who not only lack jurisdiction but have no expertise regarding Ecuadorian law or procedure."

One must remember that Ecuador's courts spent 11 years in trial and appellate proceedings only because Chevron insisted the trial be held there after the original action was filed in New York in 1993. Once damning evidence of extensive contamination was presented in Chevron's preferred courts of Ecuador, the oil company shifted gears and began to attack the very judicial system it had previously praised.

In the meantime, Chevron came back to the same U.S. court where it had blocked the original case to beg Judge Kaplan to try to rescue it from the Ecuadorian judgment. Kaplan -- who has undisclosed investments in Chevron -- was more than happy to oblige. He allowed the oil giant to present fabricated witness testimony and otherwise make a mockery of justice in his courtroom, as this document explains. (For Donziger's explanation of the case, see this article from The Huffington Post and this legal brief appealing Judge Kaplan's decision.)

In the meantime, the affected villagers are not waiting around to hear from U.S. courts. They have hired counsel in Canada and Brazil where they are pursuing Chevron's assets to force the company to comply with the rule of law. Chevron has responded in its usual fashion to its latest spate of bad news -- by trying to cyberbully a respected journalist who exposed that its entire defense to the judgment is falling apart.

For Donziger's full statement on the recent court decision, see this press release. For the court's full decision, see here.